Germany Unveils New Plan to Block Private ‘Parallel Currencies’: Libra

Germany’s government has approved a blockchain strategy that aims to prevent stablecoins from becoming alternative currencies and threatening state sovereignty.

Reuters reported on Sept. 18 that Chancellor Angela Merkel’s cabinet passed the strategy earlier today, in an apparent bid to mitigate the risks posed by the forthcoming Libra cryptocurrency from social media giant Facebook.

We will not leave currency issuance “to private companies”

Reuters cites Finance Minister Olaf Scholz as saying that, while the government wishes to further strengthen Germany as a leading technology location and foster blockchain innovation, the state remains cautious about prospective digital currency issuance from the private sector.

“We must protect consumers and state sovereignty. A core element of state sovereignty is the issuing of a currency, we will not leave this task to private companies,” he said.

The newly-approved strategy will see Germany liaising closely with European and international allies to prevent digital stablecoins from becoming alternative currencies, as well as intensifying its dialogue with the Bundesbank to explore the potential benefits and risks of digital central bank money.

Germany and France cement their anti-Libra stance

As Reuters reports, the strategy document further revealed that the German government aims to put forward new legislation in 2019 that would permit the introduction of blockchain-based electronic bonds.

The president of Germany’s financial watchdog Bafin, Felix Hufeld, had told reporters last week that the agency was in “intensive discussions with Libra.” He voiced his concern that matters of critical economic relevance were only sketchily thought through by Libra’s developers:

“We have asked questions, we have received responses. Very specific questions, less detailed answers.”

Yesterday, Minister Scholz said that Germany would clearly have to reject a parallel currency like Libra, echoing comments from German parliamentarian Thomas Heilmann as well as the staunch anti-Libra stance adopted by France.

Vowing to block Libra’s approval on European soil, French Finance Minister Bruno Le Maire has argued that Europe should consider its own “public digital currency” that would challenge the coin.